AP Exclusive: Liu calls for legalized pot in NYC

Democratic mayoral hopeful John Liu speaks at a candidate forum in New York, Tuesday, Aug. 13, 2013. The Democratic candidates for New York City mayor are holding their first debate Tuesday evening. (AP Photo/Seth Wenig)
— AP

Democratic mayoral hopeful John Liu speaks at a candidate forum in New York, Tuesday, Aug. 13, 2013. The Democratic candidates for New York City mayor are holding their first debate Tuesday evening. (AP Photo/Seth Wenig)
/ AP

Democratic mayoral hopeful John Liu talks at a candidate forum in New York, Tuesday, Aug. 13, 2013. The Democratic candidates for New York City mayor are holding their first debate Tuesday evening. (AP Photo/Seth Wenig)— AP

Democratic mayoral hopeful John Liu talks at a candidate forum in New York, Tuesday, Aug. 13, 2013. The Democratic candidates for New York City mayor are holding their first debate Tuesday evening. (AP Photo/Seth Wenig)
/ AP

NEW YORK 
New York City Comptroller John Liu is proposing a historic overhaul of the city's marijuana laws, believing that legalizing medical marijuana and allowing adults to possess an ounce of pot for recreational use would pump more than $400 million into the city's coffers.

The sweeping change, which would put New York at the forefront of a growing national debate over use of the drug, calls for recreational marijuana to be regulated and taxed like alcohol and tobacco.

Liu, the city's top financial officer who is also running for mayor, commissioned a report that finds that New York City has a $1.65 billion marijuana market. If a 20 percent excise tax and the standard 8.875 percent city sales tax is imposed on the pot sales, it would yield $400 million annually in revenue, Liu believes. Another $31 million could be saved a year in law enforcement and court costs.

"It is economically and socially just to tax it," Liu told the Associated Press in an interview Tuesday. "We can eliminate some of the criminal nature that surrounds the drug and obtain revenue from it."

The comptroller's plan, which likely faces stiff opposition from state lawmakers who would have to authorize it, calls for the state to oversee private businesses selling pot. Licenses would be required, fees would be charged, and using the drug in public or while driving would be prohibited.

Liu's team calculated that 900,000 city pot smokers spend about $2,000 a year on the drug. He is calling for the revenue surge to be used to reduce tuition at the City University of New York for city residents.

Twenty states and the District of Columbia currently permit medicinal marijuana. Two states, Washington and Colorado, last year voted to allow recreational marijuana for adults.

Officials in both states predicted that the change would be create a surge in revenue - up to $60 million annually in Colorado alone, according to supporters there. But while it is too soon to evaluate the exact economic ramifications in those states, experts do believe that the city budget would be bolstered by a similar measure.

"Now, people selling the product are doing it under the table and aren't paying any taxes on it," said Carl Davis, Senior Analyst at the Institute on Taxation and Economic Policy. "That would change. And, it stands to reason, people would also start legally producing it locally, so there would be economic benefits there too."

One of the nation's leading pro-marijuana industry groups applauded Liu's proposal.

"We recognize that marijuana is better sold behind the counter than on the streets," said Betty Aldworth, deputy director of the National Cannabis Industry Association.

But neither Liu nor any city official has the authority to decriminalize marijuana; that can only be done by a law that passes the state legislature and is then signed by Gov. Andrew Cuomo.

Cuomo has steadfastly opposed any decriminalization efforts and is seen as unlikely to waver from that stance, particularly as he approaches a re-election campaign next year. The Republicans who share majority control of the Senate have also opposed decriminalization proposals. Neither Cuomo nor the Senate GOP leadership would comment on Liu's proposal.

Mayor Michael Bloomberg, whose support could sway minds in Albany, has also long opposed efforts to legalize marijuana. His top spokesman declined comment on Liu's proposal.

Liu is currently placing fifth in Democratic mayoral polls.

Sal Alabanese, a longshot Democratic mayoral candidate, has also called for legalizing marijuana.